One’s financial savings are extremely important not only because we afford everyday expenses with them, they also work as emergency funds, for travel, and more. While important, the previously mentioned items should not be the primary use of your savings. After you have your emergency funds set aside, the rest of your money should be working for you just as hard as you worked to make it. One of the most secure and proven investments is purchasing real estate. When is the perfect moment to start and how much should you spend? Keep reading to find out.
- 7 Tips for Choosing the Ideal Investment Property.
- How to Maintain and Increase the Value of your Property Over Time.
- Why Property Management in Panama is a Necessity, not just a Service.
The perfect moment to become a property investor is NOW.
You know why? Right now the Real Estate in Panama is Inexpensive and Easy to Purchase.
It’s true that there’s no magic crystal ball on who can predict the future and give you the green light for buying a property because every investment has some level of risk and the timing is never PERFECT.
However, just as Chris Clothier writes on Memphis Invest, real estate investment is more about having the opportunity to make the most from the purchase by studying the market behavior than about age and time of the year.
Cartoon from The Spectator.
But, how is the Panamanian Market?
Besides the Panama Canal, the country is best known as a prime destination for a second home, no matter if your intention is to retire, use as a vacation property, or to invest.
Between years of 2006-2012 the market was booming 1 and there was a lot of international demand that in return generated a rise in housing prices.
From that point, the industry has experienced one of the strongest slowdowns in years, due to oversupply, a renewed US boom in real estate and stock 2 3, unfavorable exchange rates in Europe 4, Canada 5 and Venezuela 6, socio-political events and new tax policies on these countries (which once were some of the stronger markets), as well as the poor implementation of the Tourism Master Plan 2007 – 2020 7.
It seems like the market has bottomed out, but what is expected for the coming months are the results of the reactivation of massive tourism campaigns (attracting international investors, which are the ones investing in luxury projects) and the establishment of Panama-China diplomatic relations.
As well as the effects of the recent property tax reduction, and other motivations such as having:
- Easy migratory processes for temporary or permanent residence visas.
- An excellent retirees’ incentive program.
- A relatively comfortable cost of living 8.
- First class healthcare9.
- A well-established expatriate network.
So, how much money do I need?
Clearly, the amount of money for investing in Panamanian Real Estate will depend on the building characteristics, conditions, and location.
For example, Martin Lipsman, Senior Vice President at House Hunters Panama, says that “many 1,000 square foot condominium units featuring 2 bedrooms with maid quarters cost well under $100,000”. Source: Investing in Panama Real Estate.
Also, Expat’s Paradise estimates that “if you’re searching for a bit more space, a 3 bedroom 3 bathroom unit with 1600 sq. ft. will cost $200,000–$250,000”.
Buy a property that you can afford or have enough money to pay the down payment and ask for a mortgage loan; to which you can apply whether or not you are a resident.
Keep in mind that if you are not a resident, the bank will ask you a higher down payment with a higher interest rate than a local applicant.
Do you want to know more about Real Estate Investment? Click the image below to download our free guide:
- Investing in Panama Real Estate.
- Investors to boost property purchases on U.S growth- CBRE survey.
- The House just passed its big tax bill. Here’s what is in it.
- Euro Dollar Exchange Rate Drops on Slowing Eurozone Inflation Rate.
- Canadian Dollar Edges Lower, Canadian Inflation Report Next.
- Venezuela announces a new exchange rate – but this one probably won’t help either.
- Rubén Blades y sus comentarios sobre el Turismo en Panamá.
- Cost of Living in Panama City (at November 2017).
- Life in Panama.